Taxpayers Urged to Invest in Tax-Saving Instruments Before March 31 Deadline

Last Updated: March 13, 2025, 12:41 IST

As the financial year 2024-25 draws to a close, Indian taxpayers are reminded that they have just 18 days remaining until March 31 to invest in tax-saving instruments under the old tax regime. Utilizing these options is essential for those looking to reduce their income tax liability for the financial year.

Leverage Section 80C for Maximum Deductions

One of the most popular avenues for tax savings is Section 80C of the Income Tax Act, which allows individual taxpayers to claim deductions of up to ₹1.5 lakh. This section encompasses a variety of investment options that not only help in reducing taxable income but also promote savings and investments. Below are some of the eligible instruments:

Employees’ Provident Fund (EPF): A retirement savings scheme contributing equally from both the employee and employer.
Public Provident Fund (PPF): A long-term investment option with a 15-year lock-in period that offers tax-free returns.
National Savings Certificate (NSC): A fixed-income savings scheme with a maturity period of five years.
Tax-Saving Fixed Deposits: Bank fixed deposits with a lock-in period of five years.
Equity-Linked Savings Scheme (ELSS): Mutual funds with a mandatory three-year lock-in period.
Life Insurance Premiums: Premiums paid for life insurance policies qualify for deductions under Section 80C.
Sukanya Samriddhi Yojana (SSY): A scheme tailored for the financial security of a girl child.
Tuition Fees: Fees paid for children’s education in recognized institutions can be deducted.
Repayment of Home Loan Principal: The principal repayment of a home loan is also deductible under this section.

Additional Tax-Saving Options

Apart from Section 80C, several other sections provide taxpayers with further opportunities to save:

Section 80D: This section allows deductions for health insurance premiums for the taxpayer, spouse, children, and parents, with a cap of ₹25,000 for self and family, and ₹50,000 for senior citizen parents. An additional ₹5,000 is available for preventive health check-ups.
Section 80E: Interest on education loans for higher studies is fully deductible, with benefits lasting up to eight years from the start of repayment.
Sections 80EE and 80EEA: These provisions offer additional deductions for home loan interest; ₹50,000 for first-time homebuyers under Section 80EE, and ₹1.5 lakh for affordable housing loans under Section 80EEA.
Section 80G: Donations made to charitable organizations are eligible for deductions, some qualifying for a 100% deduction and others for 50%.
Section 80GG: For those who are not salaried, there is a deduction available on rent paid, with a maximum cap of ₹60,000 annually or 25% of total income, whichever is lower.
Section 24(b): This section allows a deduction of up to ₹2 lakh per year on home loan interest for self-occupied houses.
National Pension System (NPS): Tax benefits under sections 80CCD(1), 80CCD(1B), and 80CCD(2) provide further deductions for NPS contributions, with an additional ₹50,000 available under Section 80CCD(1B).
Section 80TTB: Senior citizens can claim a deduction of up to ₹50,000 on interest income from savings accounts, fixed deposits, and post office deposits.

Upcoming ITR Season

Taxpayers are also reminded that the income tax return (ITR) filing season for the assessment year 2025-26 begins on April 1, 2025. For salaried individuals, employers will issue Form 16, which summarizes income and tax deducted at source (TDS) for the financial year 2024-25. This form serves as proof that the employer has complied with tax deposit requirements on behalf of the employees.

As March 31 approaches, taxpayers are encouraged to take action, ensuring they harness these tax-saving opportunities before the deadline. With careful planning and timely investments, individuals can optimize their financial positions and achieve valuable tax savings for the financial year.